Tony English, head of LGPS Investment at Mercer, joins us for the fourth episode of series five of The Professional Investment Podcast. He chose the FT’s story about Canadian pension funds exiting the UK’s largest port operator as his news story of the week.
This story shines a light on the challenges facing the LGPS pools and partner funds as they get to grips with the Fit for the Future reforms as well as the government’s requirement for a local investment plan by September.
Tony explained how the government has been broad in its definition of local investment – giving the LGPS the option to invest hyper-locally, in the areas captured by the pool as well as UK-wide. This could lead to co-investment opportunities between pools.
We discussed how local investment usually translates to building trains, homes and hospitals but could also be considered bolstering the local economy whether that’s providing a boost to small business or revivifying high streets.
When thought about in these terms, it’s easy to see how the investment goals of auto-enrolled workplace pension schemes and the LGPS could align. Tony pointed out that both types of scheme have already invested in the HARP water project. This involves rebuilding the Haweswater Aqueduct.
Tony also mentioned the Thames Tideway tunnel as another project where UK pension schemes – along with international asset owners – can help to provided much needed infrastructure.
Once the dust has settled on the Fit for the Future reforms, Tony hopes pension schemes will be able to expand their investment horizons by working with third-party asset managers to build these much-needed infrastructure projects
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